Tacit Knowledge in Organization

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Tacit Knowledge in Organization

• Article 7- 9
• Vladimir Visipkov
• Yun Kim

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Contents

• The Role of Tacit Knowledge in Group Innovation
• By Dorothy Leonard Sylvia Sensiper, 1998
• The Concept of Ba Building a foundation for
  Knowledge Creation
• By Ikujiro Nonaka Noboru Konno, 1998
• If Only We Knew What We Know Identification and
  Transfer of Internal Best Practices
• By Carla ODell C.Jackson Grayson, 1998       

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The Role of Tacit Knowledge in Group Innovation

• By
• Dorothy Leonard Sylvia Sensiper, 1998

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Summary of the Paper

• Innovation in organization is acquired by
  creative cooperation than individual work.
• Group innovation is occurred through the
  recursive divergence and convergence process. In
  the group innovation, tacit knowledge is acting
  as material in divergence and glue in convergence
  process.
• As managerial implementation, it is required to
  make organizational culture in which intelligent
  failure and different thinking style are admitted.

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Tacit Knowledge Innovation

• Tacit Knowledge
• Hard to capture, but essential to the innovation
• Innovation
• Creative cooperation than an individual
  undertaking
• Challenge
• Required to merge of knowledge from diverse
  national, disciplinary, and personal skill-based
  perspectives

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Tacit Knowledge Individual Level(1)

• The arbitrary distinction for the convenience
• Tacit - Not Yet Explicated
• Knowledge Spectrum

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Tacit Knowledge Individual Level(2)

• Two types of tacit knowledge

Type Physical Skill Cognitive Skills
Learn through Practice Trial Error Experience
Storage Bodys Muscle, Nerve Reflexes Unconscious or Semiconscious
Assessment Performance Track Record
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Tacit Knowledge

• Why knowledge remains tacit?
• Lack of Reward
• Unawareness(automatic knowledge)
• We know more than we can tell, also we know more
  than we realize

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Tacit Knowledge

• Three Tacit Knowledge Usage in Innovation
• Problem Solving (intuition-unconscious pattern
  matching)
• Problem Finding
• Prediction and Anticipation(Hunches, Dream)

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Creativity and Social Interaction

• Creativity
• Not spontaneously arise from the air,
• But born out
• Conscious Social interaction facilitate the
  creativity activity

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Nature of innovation
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Nature of innovation Divergence(1)

• Intellectually heterogeneous groups are more
  innovative than homogeneous ones
• Creative abrasion
• Intellectual conflict between diverse viewpoints
• More options
• GroupThinking (The bay of Pigs Invasion, JFK)
• The stupid decision by very smart persons
• Neither various options nor searching effort

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Nature of innovation Divergence(2)

• IDEO Brainstorming
• Defer judgment
• Build on the ideas of others
• One conversation at a time
• Stay focused on the topic
• Encourage wild ideas

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Nature of innovation Divergence(3)

• Need for Divergent viewpoints
• Requirement for different types of expertise
• Demands for sensitivity to diverse norms and
  attitude (Global Era)

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Nature of innovation Convergence(1)

• Convergence
• The aggregate knowledge of project members has to
  be coordinated and focused
• Harvest
• Tacit knowledge as glue in Convergence
  (Tacit knowledge as
  material in Divergence)
• Some tacit knowledge as a common base

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Nature of innovation Convergence(2)

• Three different types of tacit knowledge

Tacit Know-ledge Type Overlapping Specific Collective System Guiding Tacit
Forming Media Observational Visit, Apprenticeships Co-work, Teamwork, Co-experience Mission Statement, Slogan
Characteristics Unilateral Accumulation of shared experience within specific unit Value beyond explicitly stated goal
Scope Small(individuals) Team, Dept., Group Organization-wide
Example The lesson within team members from the failed project Cotemporary luxury of Ford, Automobile Evolution of Honda City
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Managerial Implications(1)

• Barriers to the sharing of tacit knowledge
• Hierarch
• Strong preference for analysis over intuition
• Penalties for failure

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Managerial Implications(2)

• How to encourage the full exploitation of tacit
  knowledge
• Pay attention to the work environment culture
• Respect for different thinking style
• Understanding between intelligent failures and
  stupid mistakes

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Managerial Implications(3)

• Assessment of Tacit knowledge
• gt based on the result of knowledge
• Physical skills visible(skiers, tennis players)
• Cognitive skills by track record of performance
• Other method to Judge the value of tacit
  knowledge
• Ability to communicate some of the tacit
  dimensions to their knowledge through
  prototyping, drawing, demonstrating, expressing
  ideas through metaphors and analogies, or
  mentoring in general

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Discussion

• How can tacit knowledge be converted to explicit
  knowledge?
• Do you agree that Intellectually heterogeneous
  groups are more innovative than homogeneous ones?

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The Concept of Ba

• Building a foundation for
• Knowledge Creation
• By
• Ikujiro Nonaka Noboru Konno, 1998

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Summary of the Paper

• Knowledge creation is a spiraling process of
  interactions between explicit and tacit
  knowledge.
• There are four types of ba, corresponding to the
  four stages of the SECI model. These ba offer
  platforms for specific steps in the knowledge
  spiral process
• Ba can be generated by organizational effort.
  What kind of knowledge is concentrated in it
  depends on the situation and strategy of a company

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? (? Ba Field, Place)

• Field (relative concept, space distinctive from
  surrounding)
• Public (open)
• Context (space time interaction )
• Infrastructure (different in the specific
  characteristic from surrounding)
• For example, Playground for children, Conference
  for scholars, Market for exchange, Square for
  meeting (Magnetic field, Gravitation field,
  email, teleconference)
• In my opinion, more closer translation of Ba is
  not place but field (confusion from ?? Basho
  Place)

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Nonakas Ba

• Field for Knowledge Creation
• Ba is a Space that serves as a foundation for
  knowledge creation.
• Knowledge is embedded in ba, where it is then
  acquired through ones own experience or
  reflections on the experiences of others.
• If knowledge is separated from ba, it turns
  into information.

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The SECI Model
Articulation Translating into easy form
Empathize Physical Proximity
Collecting externalization Dissemination Editing
or processing
Communication Systemization
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Ba and Knowledge Conversion
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The Four Types of Ba
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Constructing Ba Cases in the Transformation of
Ba

• Sharp
• Ba project teams and Creative Lifestyle Focus
  Center
• Location outside existing organization
• Task high speed product development
• Transfer mechanism project teams
• Project initiator each division
• Criteria urgency impact on the entire firm
• Proposal reviewer General Techn. Conference

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Constructing Ba Cases in the Transformation of
Ba
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Constructing Ba Cases in the Transformation of
Ba

• Toshiba
• Ba ADI (Advanced I Strategy) Group
• Location inside organization at the level of
  other business groups
• Task provide new markets and new opportunities
  in the interactive media field
• Transfer mechanism business group

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Constructing Ba Cases in the Transformation of
Ba

• Toshiba
• Key strategies for the development of knowledge
• To intensify the sense of speed and agility,
• To change the fiscal period mind set,
• To create a boundaryless operation-partnership,
• To invest to get an early foothold in emerging
  markets.
• Financing 0.5 of each of the business unit
  sales (30 billion Yen).

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Constructing Ba Cases in the Transformation of
Ba
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Constructing Ba Cases in the Transformation of
Ba

• Maekawa Seisakusho
• Management system a group of independent
  corporations that form a collective entity
• Ba is seen as the arenas where groups can grow
  and innovate
• Each corporation has to pursue its own ba
• Ba jointly possessed by the customers and should
  not be dominated by the companys ideas

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Constructing Ba Cases in the Transformation of
Ba

• Maekawa Seisakusho
• Employees
• Specialized generalists who have a wider
  consciousness of self within organization
• Understanding of self within the totality of the
  ba constitutes the foundation of the companys
  culture

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Constructing Ba Cases in the Transformation of
Ba
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Implications

• Ba Organic Ground for Knowledge Creation
• Knowledge creation and application represent not
  economy but ecology with a cyclical cultivation
  of resources
• Ba is a stage for the resource cycle
• Effect of the positive feedback knowledge
  cultivates the feedback from the market which in
  time fosters even higher growth

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Implications

• Management for Knowledge Creation
• Leaders must support emerging processes with
  visionary proposals and personal commitment.
• This requires a different sort of leadership
  based on realization that knowledge needs to be
  nurtured, supported, enhanced, and cared for.

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Discussion

• Do you agree with the argument that Knowledge is
  embedded in ba(shared spaces)?
• What are the pros and cons of different forms of
  Ba presented in the case studies (operational,
  financial and other issues)?

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If Only We Knew What We Know

• Identification and Transfer
• of Internal Best Practices
• by
• Carl ODell and C. Jackson Grayson

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Summary of the Paper

• The Importance of Internal Benchmarking
• Difficulties Associated with Internal
  Benchmarking
• Approaches to Benchmarking and Best-Practice
  Transfer
• Keys for Effective Transfer

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Internal Benchmarking

• the process of identifying, sharing, and using
  the knowledge inside own organization.
• helps organizations to compete.
• its implementation showed the inability of
  organizations to transfer outstanding practices
  from one location to another.

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General Motor example

• GM entered into a joint venture with Toyota at
  the NUMMI assembly plant in Fremont (CA) to learn
  its approaches and transfer to GM.
• practices did not transfer to any great extend.
• GM had to create a completely new division.

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Why Didnt Knowledge and Best Practice Transfer?

• Gabriel Szulanskis research demonstrated
• Ignorance on both ends of the transfer
• Absorptive capacity of the recipient
• The lack of relationship
• A long adoption period (aver. 27 months)

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Potential Gains from the Transfer of the Best
Practices

• Buckman Laboratoriess transfer of knowledge and
  best practices system increased new
  product-related revenues by 10.
• Texas Instruments generated 1.5 billion in
  annual free wafer fabrication capacity by
  transferring internal best practices.
• Chevron saved at least 20 mil. a year on the
  operation of gas compressors in fields.

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Why is Internal Benchmarking and Transfer Tough?

1. Organizational structures promote silo behavior
   (sub-optimization).
2. A culture that values personal expertise and
   knowledge creation over sharing.
3. The lack of contact, relationships, and common
   perspectives among co-workers.

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Why is Internal Benchmarking and Transfer Tough?

1. An over-reliance on transmitting explicit
   rather than tacit information.
2. Not allowing or rewarding people for taking the
   time to learn and share.

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Why the Interest in the Transfer of Best
Practices?

• Five instigators
• A Compelling Call to Action
• Chevrons case the need for significant cost
  reduction through sharing coupled with a
  decentralized operating philosophy.

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Why the Interest in the Transfer of Best
Practices?

• Demonstrated Success
• Chevrons case network of 100 people who share
  ideas on energy-use management has generated over
  650 million savings.
• This success has created great support for more
  internal sharing and transfer.

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Why the Interest in the Transfer of Best
Practices?

• Decentralization and Downsizing
• led to demise of traditional management networks
  that served as a vehicle for the transfer of
  practices.

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Why the Interest in the Transfer of Best
Practices?

• Benchmarking Evidence
• TI and Chevron found examples of success among
  competitors and best practice firms. That created
  a sense of urgency and hope.

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Why the Interest in the Transfer of Best
Practices?

• Recognition of the Potential Gain
• Imagine the gains available if every similar
  operation were raised just to the median level of
  performance in the organization.

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The Process of Benchmarking and Best-Practice
Transfer

• Search for the best practices.
• The bumble bee model (Jim OBrient)
• Can create sibling rivalry without providing
  enough information or motivation to adopt the
  practice.
• All about sharing explicit knowledge lack of
  contacts between groups.

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The Process of Benchmarking and Best-Practice
Transfer
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Creating the Environment for Transfer

• None of the four approaches to the best-practice
  will work without removing barriers and creating
  a supportive climate.
• The enablers for transfer
• Technology
• Culture
• Leadership
• Measurement

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Technology in the Service of Best Practices

• Technology is no longer the major barrier all
  necessary software solutions already exist (Lotus
  Notes, e-mail, intranet, etc.)
• Technology helps, but it will not be a the driver
  of sharing best practices because
• Not all the information can be captured
  electronically
• The incentives for and barrier to sharing are not
  really technical

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Lessons from Technological Solutions

• The really important and useful information for
  improvement is too complex to put on-line (a lot
  of tacit knowledge is required)
• There has to be a framework for classifying
  information (many use the Process Classification
  Framework)

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Lessons from Technological Solutions

• Entering information into the system must be part
  of someones job
• Assigned as a part of job duties
• Appointed part-time people to find and enter info
• Formed screening committees
• Culture and behaviors are the key drivers and
  inhibitors of internal sharing

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Cultural Factors rewards

• A good transfer system should provide intrinsic
  rewards. (example e-mail)
• Only minority of firms use formal financial
  rewards to motivate sharing behaviors.
• Rewards may be justified in the early stages of
  building enthusiasm.
• In the long run, employees have to find the work
  itself rewarding.

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Cultural Factors senior leadership

• Not essential to endorse a particular change.
• Active and supportive role is required for a
  change to blossom across the organization.
• Leaders themselves need to change their behavior.

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Cultural Factors measurement

• Measuring performance to identify a best practice
• Metrics help identify levels of performance, but
  do not help understand why and how the
  outstanding results have been achieved
• Need to consider situational and external
  variables as well

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Cultural Factors measurement

• Measuring the impact of initiatives and best
  practice transfer itself
• The current measurement systems that include,
  e.g., measures of the frequency of use of the
  system, satisfaction with the information in
  databases, and cycle time to implement best
  practices, are still embryonic.

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Lessons Seven Keys to Effective Transfer

• Use benchmarking to create a sense of emergency
  or find a compelling reason to change
• Successful stories of internal benchmarking help
  overcome cynicism.
• External benchmarking helps avoid setting the bar
  too low and keep focused on the market.

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Lessons Seven Keys to Effective Transfer

• Focus initial efforts on critical business
  issues that have high payoff and are aligned with
  organizational values and strategy
• Use ROI to select projects
• Remember about limited chances to demonstrate
  success

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Lessons Seven Keys to Effective Transfer

• Make sure that every plane you allow to take off
  has a runway available for landing
• Investments in and support of change is limited
  at any one time
• Dont let measurement get in the way
• Dont waste time debating who is the best, focus
  on areas with dramatic differences.

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Lessons Seven Keys to Effective Transfer

• Change the reward system to encourage sharing
  and transfer
• Promote, recognize, reward people who model
  sharing behavior.
• Reinforce the need of taking responsibilities.
• Support teams that invest or give up resources
  to make sharing happen.

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Lessons Seven Keys to Effective Transfer

• Use technology as a catalysis to support
  networks and the internal search for best
  practices, but dont rely on it as a solution
• Leaders will need to consistently and constantly
  spread the message of sharing and leveraging
  knowledge for the greater good
• Encourage collaboration across boundaries of
  structure, time, and function

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Discussion

• Organizational silos are one of the major
  barrier in the knowledge transfer. What are the
  methods that help overcome sub-optimization?

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